Central bank of Nigeria raises interest rates to combat soaring inflation

Nigeria's central bank implemented a significant increase in its monetary policy rate, raising it by 200 basis points to 24.75% from the previous 22.75%, according to Governor Olayemi Cardoso on Tuesday.

This decision marks a continuation of the bank's efforts to combat surging inflation.

Last month, the bank executed its most substantial rate hike in approximately 17 years, elevating the rate by 4 percentage points in a bid to rein in inflationary pressures. With inflation surpassing 30% on an annual basis, reaching its highest level in nearly three decades, the country grapples with a cost of living crisis affecting millions of its citizens.

Speaking at a press conference, Governor Cardoso emphasized the Monetary Policy Committee (MPC)'s unanimous conviction to persist with the tightening measures to curb inflation while anticipating a moderation in price pressures starting from May. He underscored the committee's focus on stabilizing inflation expectations and ensuring sustained exchange rate stability.

This recent decision by the MPC, only the second under Governor Cardoso's tenure since assuming office in September, follows a series of reforms initiated by President Bola Tinubu, including the cessation of a burdensome fuel subsidy and the devaluation of the national currency, the naira, on two occasions.